8 November 2021
Insolvency law is constantly evolving, as legislation must adapt to practice (the legislative developments related to the sanitary crisis are the best example). The subject matter is enshrined in Book XX of the Belgian Code of Economic Law, titled “insolvabilité des entreprises“, which came into force on 1 May 2018. Pragmatism is omnipresent in the practice of this matter.
You have certainly already heard of judicial reorganisation procedures (“PRJ”) and bankruptcies, but are you aware of the usefulness and consequences of such so-called insolvency procedures?
The first pillar of insolvency law is the PRJ, and its purpose is to try to preserve companies (entreprises) whose continuity is threatened. There are three types of PRJ:
- By mutual agreement (accord amiable);
- By collective agreement (accord collectif);
- By transfer of business (transfert d’entreprise).
However, when a company is no longer able to pay its debts and is in a state of suspension of payments, this can lead to the second pillar of insolvency law: bankruptcy, or the “death” of the legal person.
Other mechanisms are also linked to or form an integral part of insolvency law: corporate mediation (médiation d’entreprise), provisional administration (administration provisoire), judicial or voluntary dissolution or liquidation, etc.
All of the above mechanisms have their own particularities. They can be applied separately or in a complementary manner, depending on the specific case. It is up to the insolvency law specialist to find the appropriate mechanism(s) to achieve the objectives set by the company (preservation of the profitable business or branch of activity, liquidation of assets, bankruptcy of the company, negotiation with certain creditors, etc.).
In-depth expertise in this area is essential to enable us to assist our clients whose continuity is threatened and to enable them to take creative and appropriate decisions to preserve the continuity of their business and/or to ensure the protection of their personal interests.
Of course, we also advise other stakeholders of the company (i.e. creditors, shareholders, directors, etc.), whose interests may be strongly affected by insolvency proceedings.
A member of the firm is also registered on the list of curators of the French-speaking Enterprise Court of Brussels and is frequently appointed to manage bankruptcy operations.
1 « Entreprise » au sens du Code de droit économique, c’est-à-dire tout personne physique qui exerce une activité professionnelle à titre indépendant, toute personne morale (société, ASBL ou fondation), ou tout autre organisation sans personnalité juridique (ex : une société de droit commun).